Loan Shark Rates Of Upto 600%

[libitina]

http://www.sky.com/skynews/article/0,,30100-13481751,00.html

I do feel sorry for the people that feel they have no other alternative, but can these people not do simple maths?

[Mushroom]

Er no.

Some survey I recently heard mentioned in Media reported that a large number, which I can't remember, don't know what APR means or the difference between flat rate and APR.

Financial ignorance, as we here are aware, is rife.

Suits the sellers fine.

[ExeC]

"The Corporation has launched a plan to encourage housing associations and other social landlords to help their financially excluded residents gain access to affordable credit and other financial services."

[Andrew McP]

If I said "lend me a tenner today and I'll give you £11 back tomorrow" it'd sound reasonable enough. But obviously it represents a *huge* interest rate. While I don't really want to defend any doorstep lending, for no hassle, short term loans they serve a purpose in circumstances where folk may not have access to overdrafts or credit cards.

In some ways it's no different to using a pawnbroker, though given the personal nature of the service it's obviously very easy for vulnerable people to get sucked into a very nasty debt spiral.

Sadly such people will always end up in trouble one way or another. Anything other than face the fact that they simply can't afford what they feel they need to buy.

Andrew McP

[erd]

http://www.sky.com/skynews/article/0,,30100-13481751,00.html

I do feel sorry for the people that feel they have no other alternative, but can these people not do simple maths?

APR's show the true cost of lending. These lenders come to the door every week, for debts that are in general less than £500. This is where they claim their costs lie and you can see why, add in risk and they can realistically charge what they like.

The truth is the people taking these loans on, should not have access to credit. Its hard, but they just can't afford it!

[the_duke_of_hazzard]

If I said "lend me a tenner today and I'll give you £11 back tomorrow" it'd sound reasonable enough. But obviously it represents a *huge* interest rate. While I don't really want to defend any doorstep lending, for no hassle, short term loans they serve a purpose in circumstances where folk may not have access to overdrafts or credit cards.

In some ways it's no different to using a pawnbroker, though given the personal nature of the service it's obviously very easy for vulnerable people to get sucked into a very nasty debt spiral.

Sadly such people will always end up in trouble one way or another. Anything other than face the fact that they simply can't afford what they feel they need to buy.

Andrew McP

People understand the consequences of using a pawnbroker because it's very easy. They don't understand the consequences of high interest rates.

My fiancee's sister works in a rough se london school. When she had loans at 50% APR offers falling on her mat, she said "screw the curriculum" and taught her kids about loans and interest rates. Most of them thought a higher rate of interest was better, because "it's a higher number innit?"

[libitina]

Most of them thought a higher rate of interest was better, because "it's a higher number innit?"

Oh dear.

Does she still teach her pupils about interest rates etc...?

[dogbox]

The truth is the people taking these loans on, should not have access to credit. Its hard, but they just can't afford it!

Mostly being poor comes down to lack of planning.

I know people who arrived here with nothing and couldnt speak English 15 years ago (FAR HARDER START THAN MY COUNCIL ESTATE ENGLISH FREINDS) yet they have carved a fulfilling life.

I grew up on a council estate. We all had the same life chances. One group made plans to improve thier lot. This would take the form of things such as not wasting money on pre - prepared junk food, but instead buying a large sack of spuds, carrots and Mince to make stews. Other examples including simple steps such as getting a couple of paper - rounds and saving the money. ANYONE COULD HAVE DONE THIS.

The other group took the decision not to make plans, not to try and wrestle control over thier lives, not to save some money while they had the chance. They prefered to just drift and bascially enjoy themselves come what may. Kays catalogue was the first credit these people abused - by not repaying the debt (no intention to, they were all at it) and thier problems just spiraled from there. Now those easy - life types are still there.

This is the key reason I am a conservative. I beleive most of us are responsible for our own outcomes, whereas lefties can do no other than provide those that dont make the right choices a list of excuses, which those people's children will also be availed of by the well meaning leftie who is unable to confront truth.

Edited December 19, 2005 by dogbox

[since the beginning]

Mostly being poor comes down to lack of planning.

I know people who arrived here with nothing and couldnt speak English 15 years ago (FAR HARDER START THAN MY COUNCIL ESTATE ENGLISH FREINDS) yet they have carved a fulfilling life.

I grew up on a council estate. We all had the same life chances. One group made plans to improve thier lot. This would take the form of things such as not wasting money on pre - prepared junk food, but instead buying a large sack of spuds, carrots and Mince to make stews. Other examples including simple steps such as getting a couple of paper - rounds and saving the money. ANYONE COULD HAVE DONE THIS.

The other group took the decision not to make plans, not to try and wrestle control over thier lives, not to save some money while they had the chance. They prefered to just drift and bascially enjoy themselves come what may. Kays catalogue was the first credit these people abused - by not repaying the debt (no intention to, they were all at it) and thier problems just spiraled from there. Now those easy - life types are still there.

This is the key reason I am a conservative. I beleive most of us are responsible for our own outcomes, whereas lefties can do no other than provide those that dont make the right choices a list of excuses, which those people's children will also be availed of by the well meaning leftie who is unable to confront truth.

Did you honestly make the right decisions from an early age though or did you have decent parents. I don't think I would have gone to school etc at say 6-14 unless my parents thought it was a good idea. By the time most people can begin to make decent decisions for themselves it can be too late.

I'm not particulary leftie but does annoy to some extent when people say you create your own luck etc I owe alot to other people. And the UK as a country has far more opportunities than say the Congo we don't completely control are own destiny.

[libitina]

While I don't doubt that there are people like you describe Dogbox, surely you're tarring all council estate residents with the same brush. For many, this type of credit is seen as the only option and once they have signed the dotted line they might as well just hand over all their worldly goods as it will take them years to pay off this debt. In the meantime household bills still arrive, christmases and birthdays to be catered for etc...

The industry needs tighter regulations to stop people in this situation from ever getting into this mess in the first place, maybe then they can concentrate on their paper rounds and stews.

[BuyingBear]

People understand the consequences of using a pawnbroker because it's very easy. They don't understand the consequences of high interest rates.

Indeed, and they're deprived of the item from the outset, they can walk away without any consequences (aside from losing the item of course), doorstep lenders are rather pernicious, they know people just can't walk away unless they hit the jackpot or something hence they then take on rollover loans and get in over their heads.

It probably goes some way to explain the desperation that drives the poor to buy endless scratch cards, it's seen as the only possible way out despite the ridiculous odds. Add in a welfare state that conspires to farm people like sheep then you have real problems, there are entire beuracracies staffed with well paid middle-class people with excellent pension rights that rely on perpetuating a pool of desolate poor people in order to justify their own jobs.

They prefered to just drift and bascially enjoy themselves come what may. Kays catalogue was the first credit these people abused - by not repaying the debt (no intention to, they were all at it) and thier problems just spiraled from there.

Indeed, this is what the credit rating company Experian grew out of, it's still part of GUS and was originally set up so they didn't extend catalogue service to known credit risks. By screwing Kays they took their first step in destroying their credit worthiness with a nascent Experian.

Edited December 19, 2005 by BuyingBear

[MarkG]

there are entire beuracracies staffed with well paid middle-class people with excellent pension rights that rely on perpetuating a pool of desolate poor people in order to justify their own jobs.

Indeed: that's the biggest reason to oppose the welfare state... it breeds entire generations of workers who benefit from pushing others into poverty and keeping them there. The more people they push into poverty, the more money they make.

Charities, on the other hand, try to get people out of poverty: if they fail, then they lose their income over time.

[dogbox]

While I don't doubt that there are people like you describe Dogbox, surely you're tarring all council estate residents with the same brush.

No, Im doing exactly the opposite. In my post I stated some of us decided to take small steps to change our lives (such as starting a couple of paper - rounds and saving the money) whilst others chose not to take those simple first steps.

My point is that those of a lazy irresponsible nature are given excuses by the well meaning left. You say 'such people have no choice other than loan sharks' - again this is just an excuse. They do have a choice just as I did, to make sure they take a few simple steps to stop them going down the wrong path.

Having said all this I accept some kids have terrible examples set my parent, so making the right choices is harder, but it is the left that allowed thier parents to act in an irresponsible pateern in the first place thus establishing the never ending cycles of dispair.

[libitina]

. You say 'such people have no choice other than loan sharks' - again this is just an excuse.

No, I said 'they' feel they have no choice. Which in essence I suppose is the same really as any reputable lender wouldn't touch them with a bargepole.

[dogbox]

Add in a welfare state that conspires to farm people like sheep then you have real problems, there are entire beuracracies staffed with well paid middle-class people with excellent pension rights that rely on perpetuating a pool of desolate poor people in order to justify their own jobs.

Well said indeed.

Middle class Peaches Geldof was on TV last night, classic misguided leftie. She argued that young gangs have 'nothing to do' hence the nusiance problem. 'Nothing to do'..what?

Same tired old leftist arguments that completely miss the point.

Look, I grew up on a council estate so I suppose we had 'nothing to do', but nothing could be further from the truth, there were'nt enough hours in the day. We had fun all the way by climbing trees, flirting, making home made fireworks, playing rounders, camping with improvised plastic sheets and biscuit tins full of sausages (walked a few miles to forest - really difficult that), playing in band, dares, making things and on and on.

Again lefties cant help themselves, they have to provide people they see as weak with excuses, instead of confronting the problem head - on by encouraging kids to realise there is a heap of fun to be had if you simply give it a little thought.

Lefties are the council of dispair.